[Federal Register Volume 72, Number 72 (Monday, April 16, 2007)]
[Notices]
[Pages 18949-18959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7110]



[[Page 18949]]

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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service


Announcement of Value-Added Producer Grant Application Deadlines

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Notice of solicitation of applications.

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SUMMARY: The Rural Business-Cooperative Service (RBS) announces the 
availability of approximately $19.3 million in competitive grant funds 
for fiscal year (FY) 2007 to help independent agricultural producers 
enter into value-added activities.
    Awards may be made for planning activities or for working capital 
expenses, but not for both. The maximum grant amount for a planning 
grant is $100,000 and the maximum grant amount for a working capital 
grant is $300,000.

DATES: Applications for grants must be submitted on paper or 
electronically according to the following deadlines:
    Paper copies must be postmarked and mailed, shipped, or sent 
overnight no later than May 16, 2007, to be eligible for FY 2007 grant 
funding. Late applications are not eligible for FY 2007 grant funding.
    Electronic copies must be received by May 16, 2007 to be eligible 
for FY 2007 grant funding. Late applications are not eligible for FY 
2007 grant funding.

ADDRESSES: An application guide and other materials may be obtained at 
http://www.rurdev.usda.gov/rbs/coops/vadg.htm or by contacting the 
applicant's USDA Rural Development State Office. The State Office can 
be reached by calling (202) 720-4323 and pressing ``1''.
    Paper applications must be submitted to: Cooperative Programs, 
Attn: VAPG Program, Mail Stop 3250, Room 4016-South, 1400 Independence 
Ave., SW., Washington, DC 20250-3250. The phone number that should be 
used for courier delivery is (202) 720-7558.
    Electronic applications must be submitted through the Grants.gov 
Web site at: http://www.grants.gov, following the instructions found on 
this Web site.

FOR FURTHER INFORMATION CONTACT: Applicants should visit the program 
Web site at http://www.rurdev.usda.gov/rbs/coops/vadg.htm, which 
contains application guidance, including Frequently Asked Questions and 
an Application Guide. Or applicants may contact their USDA Rural 
Development State Office. The State Office can be reached by calling 
(202) 720-4323 and pressing ``1'', or by selecting the State Contacts 
link at the above Web site.
    Applicants are encouraged to contact their State Offices well in 
advance of the deadline to discuss their projects and ask any questions 
about the application process. Also, applicants may submit drafts of 
their applications to their State Offices for a preliminary review 
anytime prior to May 7, 2007. The preliminary review will only assess 
the eligibility of the application and its completeness and the results 
of the preliminary review are not binding on the Agency.

SUPPLEMENTARY INFORMATION:

Overview

    Federal Agency: USDA Rural Development Cooperative Programs.
    Funding Opportunity Title: Value-Added Producer Grants.
    Announcement Type: Initial announcement.
    Catalog of Federal Domestic Assistance Number: 10.352.
    Dates: Application Deadline: Applications for grants must be 
submitted on paper or electronically according to the following 
deadlines:
    Paper copies must be postmarked and mailed, shipped, or sent 
overnight no later than May 16, 2007 to be eligible for FY 2007 grant 
funding. Late applications are not eligible for FY 2007 grant funding.
    Electronic copies must be received by May 16, 2007 to be eligible 
for FY 2007 grant funding. Late applications are not eligible for FY 
2007 grant funding.

I. Funding Opportunity Description

    This solicitation is issued pursuant to section 231 of the 
Agriculture Risk Protection Act of 2000 (Pub. L. 106-224) as amended by 
section 6401 of the Farm Security and Rural Investment Act of 2002 
(Pub. L. 107-171 (see 7 U.S.C. 1621 note)) authorizing the 
establishment of the Value-Added Agricultural Product Market 
Development grants, also known as Value-Added Producer Grants. The 
Secretary of Agriculture has delegated the program's administration to 
USDA Rural Development Cooperative Programs.
    The primary objective of this grant program is to help Independent 
Producers of Agricultural Commodities, Agriculture Producer Groups, 
Farmer and Rancher Cooperatives, and Majority-Controlled Producer-Based 
Business Ventures develop strategies to create marketing opportunities 
and to help develop Business Plans for viable marketing opportunities 
regarding production of biobased products from agricultural 
commodities. Cooperative Programs will competitively award funds for 
Planning Grants and Working Capital Grants. In order to provide program 
benefits to as many eligible applicants as possible, applicants must 
apply only for a Planning Grant or for a Working Capital Grant, but not 
both. Applicants other than Independent Producers must limit their 
Projects to Emerging Markets. Grants will only be awarded if Projects 
are determined to be economically viable and sustainable. No more than 
10 percent of program funds can go to applicants that are Majority-
Controlled Producer-Based Business Ventures.

Definitions

    The definitions at 7 CFR 4284.3 and 4284.904 are incorporated by 
reference. In addition, the Agency uses the following terms in this 
NOSA: Agricultural Commodity, Bioenergy Project, Biomass, Business 
Plan, Conflict of Farm or Ranch, Feasibility Study, Project, Renewable 
Energy, and Venture. It is the Agency's position that those terms are 
defined as follows.
    Agricultural Commodity--An unprocessed product of farms, ranches, 
nurseries, and forests. Agricultural Commodities include: Livestock, 
poultry, and fish; fruits and vegetables; grains, such as wheat, 
barley, oats, rye, triticale, rice, corn, and sorghum; legumes, such as 
field beans and peas; animal feed and forage crops; seed crops; fiber 
crops, such as cotton; oil crops, such as safflower, sunflower, corn, 
and cottonseed; trees grown for lumber and wood products; nursery stock 
grown commercially; Christmas trees; ornamentals and cut flowers; and 
turf grown commercially for sod. Agricultural Commodities do not 
include horses or animals raised as pets, such as cats, dogs, and 
ferrets.
    Bioenergy Project--A Renewable Energy system that produces fuel, 
thermal energy, or electric power from a Biomass source.
    Biomass--Any organic material that is available on a renewable or 
recurring basis, including agricultural crops; trees grown for energy 
production; wood waste and wood residues; plants, including aquatic 
plants and grasses; fibers; animal waste and other waste materials; and 
fats, oils, and greases, including recycled fats, oils, and greases. It 
does not include paper that is commonly recycled or un-segregated solid 
waste.
    Business Plan--A plan for Venture implementation that includes key 
management personnel, business location, the financial package, product 
flow, and possible customers. It also includes at least three years of 
pro forma financial statements. The plan is usually

[[Page 18950]]

developed by the business with assistance from third parties.
    Conflict of Interest--A situation in which a person or entity has 
competing professional or personal interests that make it difficult for 
the person or business to act impartially. An example of a Conflict of 
Interest is a grant recipient or an employee of a recipient that 
conducts or significantly participates in conducting a Feasibility 
Study for the recipient.
    Farm or Ranch--Any place from which $1,000 or more of agricultural 
products (crops and livestock) were raised and sold or normally would 
have been raised and sold during the previous year.
    Feasibility Study--An independent, third party analysis that shows 
how the Venture would operate under a set of assumptions--the 
technology used (the facilities, equipment, production process, etc.), 
the qualifications of the management team, and the financial aspects 
(capital needs, volume, cost of goods, wages, etc.). The analysis 
should answer the following questions about the Venture.
    (1) Where is it now?
    (2) Where does the group want to go?
    (3) Why does the group want to go forward with the Venture?
    (4) How will the group accomplish the Venture?
    (5) What resources are needed?
    (6) Who will provide assistance?
    (7) When will the Venture be completed?
    (8) How much will the Venture cost?
    (9) What are the risks?
    Project--Includes all proposed activities to be funded by the VAPG 
and Matching Funds.
    Renewable Energy--Energy derived from a wind, solar, biomass, or 
geothermal source; or hydrogen derived from biomass or water using 
wind, solar, biomass, or geothermal energy sources.
    Venture--Includes the Project and any other activities related to 
the production, processing, and marketing of the Value-Added product 
that is the subject of the VAPG grant request.

II. Award Information

    Type of Award: Grant.
    Fiscal Year Funds: FY 2007.
    Approximate Total Funding: $19.475 million.
    Approximate Number of Awards: 130.
    Approximate Average Award: $150,000.
    Floor of Award Range: None.
    Ceiling of Award Range: $100,000 for Planning Grants and $300,000 
for Working Capital Grants.
    Anticipated Award Date: September 1, 2007.
    Budget Period Length: 12 months.
    Project Period Length: 12 months.

III. Eligibility Information

A. Eligible Applicants

    Applicants must be an Independent Producer, Agriculture Producer 
Group, Farmer or Rancher Cooperative, or Majority-Controlled Producer-
Based Business Venture as defined in 7 CFR part 4284, subpart A. If the 
applicant is an unincorporated group (steering committee), it must form 
a legal entity before the grant funds can be obligated. Please note 
that a steering committee may only apply as an Independent Producer. 
Therefore, the steering committee must be composed of 100 percent 
Independent Producers and the business to be formed must meet the 
definition of Independent Producer. Also, entities that contract out 
the production of an Agricultural Commodity are not considered 
Independent Producers. In addition, note that Farmer or Rancher 
Cooperatives that are 100 percent owned by farmers and ranchers are not 
considered under the Independent Producer category; these applicants 
must apply as Farmer or Rancher Cooperatives. It is the Agency's 
position that if a cooperative is 100 percent owned and controlled by 
agricultural harvesters (e.g. fishermen, loggers), it is eligible only 
as an Independent Producer and not as a Farmer- or Rancher-Cooperative. 
If a cooperative is not 100 percent owned and controlled by farmers and 
ranchers or 100 percent owned and controlled by agricultural 
harvesters, it may still be eligible to apply as a Majority-Controlled 
Producer-Based Business Venture, provided it meets the definition in 7 
CFR part 4284, subpart A.

B. Cost Sharing or Matching

    Matching Funds are required. Applicants must verify in their 
applications that Matching Funds are available for the time period of 
the grant. Matching Funds must be at least equal to the amount of grant 
funds requested. Unless provided by other authorizing legislation, 
other Federal grant funds cannot be used as Matching Funds. Matching 
Funds must be spent at a rate equal to or greater than the rate at 
which grant funds are expended. Matching Funds must be provided by 
either the applicant or by a third party in the form of cash or in-kind 
contributions. Matching Funds must be spent on eligible expenses and 
must be from eligible sources.

C. Other Eligibility Requirements

    Product Eligibility: The project proposed must involve a Value-
Added product as defined in 7 CFR part 4284, subpart A. The definition 
of Value-Added includes four categories. They are the incremental value 
that is realized by the producer from an Agricultural Commodity or 
product as the result of:
    (1) A change in its physical state,
    (2) Differentiated production or marketing, as demonstrated in a 
Business Plan, or
    (3) Product segregation.
    The fourth category is the economic benefit realized from the 
production of Farm- or Ranch-based Renewable Energy.
    Purpose Eligibility: The application must specify whether grant 
funds are requested for planning activities or for working capital. 
Applicants may not request funds for both types of activities in one 
application. Applications requesting more than the maximum grant amount 
will be considered ineligible. Please note that working capital 
expenses are not considered eligible for Planning Grants and planning 
expenses are not considered eligible for Working Capital Grants.
    It is the Agency's position that applicants other than Independent 
Producers applying for a Working Capital Grant must demonstrate that 
the venture has not been in operation more than two years at the time 
of application in order to show that they are entering an Emerging 
Market.
    Grant Period Eligibility: Applications that have a timeframe of 
more than 365 days will be considered ineligible. Applications that 
request funds for a time period beginning prior to October 1, 2007 and/
or ending after November 30, 2008, will be considered ineligible.
    Multiple Grant Eligibility: An applicant can only submit one 
application per funding cycle.
    Applicants who have already received a Planning Grant for the 
proposed Project cannot receive another Planning Grant for the same 
Project. Applicants who have already received a Working Capital Grant 
for a Project cannot receive any additional grants for that Project.
    Current Grant Eligibility: If an applicant currently has a VAPG, 
that grant period must be scheduled to expire by December 31, 2007.
    Judgment Eligibility: In accordance with 7 CFR part 4284.6.

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IV. Application and Submission Information

A. Address To Request Application Package

    The application package for applying on paper for this funding 
opportunity can be obtained at http://www.rurdev.usda.gov/rbs/coops/vadg.htm. Alternatively, applicants may contact their USDA Rural 
Development State Office. The State Office can be reached by calling 
(202) 720-4323 and pressing ``1''. For electronic applications, 
applicants must visit http://www.grants.gov and follow the 
instructions.

B. Content and Form of Submission

    Applications must be submitted on paper or electronically. An 
Application Guide may be viewed at http://www.rurdev.usda.gov/rbs/coops/vadg.htm. It is recommended that applicants use the template 
provided on the Web site. The template can be filled out electronically 
and printed out for submission with the required forms for a paper 
submission or it can be filled out electronically and submitted as an 
attachment through Grants.gov.
    If an application is submitted on paper, one signed original of the 
complete application must be submitted.
    If the application is submitted electronically, the applicant must 
follow the instructions given at http://www.grants.gov. Applicants are 
advised to visit the site well in advance of the application deadline 
if they plan to apply electronically to insure that they have obtained 
the proper authentication and have sufficient computer resources to 
complete the application.
    Applicants must complete and submit the following elements. Please 
note that the requirements in the following locations within 7 CFR part 
4284 have been combined with other requirements to simplify the 
application and reduce duplication: Sec.  4284.910(b)(5)(i), Sec.  
4284.910(b)(5)(ii), and Sec.  4284.910(b)(5)(iv). The Agency will 
conduct an initial screening of all application for eligibility and to 
determine whether the application is complete and sufficiently 
responsive to the requirements set forth in this Notice to allow for an 
informed review. Information submitted as part of the application will 
be protected to the extent permitted by law.
    1. Form SF-424, ``Application for Federal Assistance.'' The form 
must be completed, signed and submitted as part of the application 
package. Please note that applicants are required to have an Employer 
Identification Number (or a Social Security Number if the applicant is 
an individual or steering committee) and a DUNS number (unless the 
applicant is an individual). The DUNS number is a nine-digit 
identification number, which uniquely identifies business entities. To 
obtain a DUNS number, access http://www.dnb.com/us, or call (866) 705-
5711. Additional information on the VAPG program can be obtained at 
http://www.rurdev.usda.gov/rbs/coops/vadg.htm or by contacting the 
applicant's Rural Development State Office. The State Office can be 
reached by calling (202) 720-4323 and pressing ``1''.
    2. Form SF-424A, ``Budget Information--Non-Construction Programs.'' 
This form must be completed and submitted as part of the application 
package.
    3. Form SF-424B, ``Assurances--Non-Construction Programs.'' This 
form must be completed, signed, and submitted as part of the 
application package.
    4. Title Page (limited to one page). The title page must include 
the title of the project and may include other relevant identifying 
information.
    5. Table of Contents. For ease of locating information, each 
application must contain a detailed Table of Contents (TOC) immediately 
following the title page.
    6. Executive Summary (limited to one page). The Executive Summary 
should briefly describe the Project, including goals, tasks to be 
completed and other relevant information that provides a general 
overview of the Project. In this element, the applicant must clearly 
state whether the application is for a Planning Grant or a Working 
Capital Grant and the grant amount requested.
    7. Eligibility Discussion (limited to four pages). The Eligibility 
Discussion is a detailed discussion describing how the eligibility 
requirements are met.
    i. Applicant Eligibility. The applicant must first describe how it 
meets the definition of an Independent Producer, Agriculture Producer 
Group, Farmer or Rancher Cooperative, or a Majority-Controlled 
Producer-Based Business Venture as defined in 7 CFR 4284.3. The 
applicant must apply as only one type of applicant.
    If the applicant is an Independent Producer, the application must 
provide the following information: (1) A discussion of how 100 percent 
of the owners of the applicant organization meet the definition of an 
Independent Producer; (2) a discussion that demonstrates these owners 
currently own and produce more than 50 percent of the raw commodity 
that will be used for the Value-Added product; and (3) a discussion 
that demonstrates the product will be owned by the Independent 
Producers from its raw commodity state through the production of the 
Value-Added product during the Project.
    If the applicant is an Agriculture Producer Group, the application 
must provide the following information: (1) The mission of the 
applicant; (2) a statement identifying the number of the applicant's 
membership and board of directors that meet the definition of 
Independent Producer as well as the number of non-Independent 
Producers; (3) an identification (either by name or by class) of the 
Independent Producers on whose behalf the work will be done; (4) a 
discussion demonstrating that these Independent Producers currently own 
and produce more than 50 percent of the raw commodity that will be used 
for the Value-Added product; and (5) a discussion demonstrating that 
the Value-Added product will be owned by the Independent Producers from 
its raw commodity state through the production of the Value-Added 
product during the Project. Note that applicants tentatively selected 
for a grant award must verify that the work will be done on behalf of 
the Independent Producers identified in the application.
    If the applicant is a Farmer or Rancher Cooperative, the 
application must provide the following information: (1) The applicant 
must reference the business' good standing as a cooperative in its 
state of incorporation; (2) the applicant must also explain how the 
cooperative is 100 percent owned and controlled by farmers and 
ranchers; (3) if the applicant is applying on behalf of only a portion 
of its membership, that portion must be identified, and the applicant 
must explain how all members in this portion of its membership meet the 
definition of an Independent Producer; (4) a discussion demonstrating 
that these Independent Producers currently own and produce more than 50 
percent of the raw commodity that will be used for the Value-Added 
product; and (5) a discussion demonstrating that the Value-Added 
product will be owned by the Independent Producers from its raw 
commodity state through the production of the Value-Added product 
during the Project.
    If the applicant is a Majority-Controlled Producer-Based Business 
Venture, the application must provide the following information: (1) 
The number of owners who are Independent Producers and the number of 
owners who are not Independent Producers; (2) the financial interest of 
Independent Producers and non-Independent

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Producers in the applicant organization; (3) the voting interest of 
Independent Producers and non-Independent Producers on the governing 
board; (4) a discussion demonstrating that these Independent Producers 
currently own and produce more than 50 percent of the raw commodity 
that will be used for the Value-Added product; and (5) a discussion 
demonstrating that the Value-Added product will be owned by the 
Independent Producers from its raw commodity state through the 
production of the Value-Added product during the Project.
    ii. Product Eligibility. The applicant must next describe how the 
Value-Added product to be produced meets at least one of the categories 
in the definition of Value-Added as defined in 7 CFR part 4284, subpart 
A. Regardless of which category is met, the applicant must describe the 
raw commodity that will be used, the process used to add value, and the 
Value-Added product that will be marketed.
    If the product meets the first category (incremental value realized 
as a result of a change in the physical state of the commodity), the 
application must explain how the change in physical state or form of 
the product enhances its value. A change in physical state is only 
achieved if the product cannot be returned to its original state. 
Examples of this type of product include: fish fillets, diced tomatoes, 
ethanol, bio-diesel, and wool rugs. The following examples are not 
eligible under this category: dehydrated corn, raw fiber, and cut 
flowers.
    If the product meets the second category (incremental value 
realized as a result of differentiated production or marketing), the 
application must explain how the production or marketing of the 
commodity enhances the Value-Added product's value. The enhancement of 
value must be quantified by using a comparison with products produced 
or marketed in the standard manner, using information from the 
Feasibility Study and Business Plan developed for the Venture. Examples 
of this type of product include: organic carrots, identity-preserved 
apples, and branded milk. The following example is not eligible under 
this category: marketing a non-standard variety of produce. Also, a 
Business Plan that has been developed for the applicant for the Venture 
must be referenced by indicating who developed the Business Plan and 
when it was completed.
    If the product meets the third category (incremental value realized 
as a result of product segregation), the application must explain how 
the physical segregation of a commodity enhances its value. The 
enhancement of value should be quantified to the extent possible by 
using a comparison with products marketed without segregation. 
Applicants must demonstrate that a physical barrier (i.e. distance or a 
structure) separates the commodity from other varieties of the same 
commodity during production, that the commodity will continue to be 
separated during processing, and that the Value-Added product produced 
will be separated from similar products during marketing. An example of 
this type of product is non-genetically-modified corn that is produced 
on the same Farm as genetically-modified corn where an increase in 
incremental value is realized for either one or both of the types of 
corn that is attributed to physical segregation. The following examples 
are not eligible under this category: livestock sorted by grade, 
produce sorted by size or grade.
    If the product meets the fourth category (economic benefit realized 
by Farm-or Ranch-based production of Renewable Energy), the application 
must explain how the Renewable Energy will be generated on a Farm or a 
Ranch owned or leased by the owners of the Venture. Please note that 
the owners/leasers of the Farm or Ranch must currently produce an 
Agricultural Commodity on the Farm or Ranch and the Farm or Ranch must 
meet the definition of a Farm or a Ranch as defined in the 
``Definitions'' section of this notice. Examples of this type of 
product are wind energy, solar energy, and anaerobic digesters. The 
following examples are not eligible under this category: any type of 
fuel, such as ethanol, bio-diesel, and switchgrass pellets, that is not 
generated on a Farm or Ranch owned or leased by the owners of the 
Venture.
    iii. Purpose Eligibility. The applicant must describe how the 
Project purpose is eligible for funding. The project purpose is 
comprised of two components. First, the applicant must describe how the 
proposed Project consists of eligible planning activities or eligible 
working capital activities.
    Second, the applicant must demonstrate that the activities are 
directly related to the processing and/or marketing of a Value-Added 
product. If the applicant is applying for a Working Capital Grant, it 
must reference a third-party, independent Feasibility Study and a 
Business Plan that have been completed specifically for the proposed 
Venture. The reference must include the name of the party who conducted 
the Feasibility Study and developed the Business Plan as well as the 
dates the Feasibility Study and Business Plan were completed.
    If the applicant is applying for a Working Capital Grant, and it is 
an Agriculture Producer Group, a Farmer or Rancher Cooperative, or a 
Majority-Controlled Producer-Based Business Venture, it must also 
demonstrate that its proposed Venture has been in operation for less 
than two years at the time of application, in order to show that the 
applicant is entering an Emerging Market.
    8. Proposal Narrative (limited to 35 pages).
    i. Goals of the Project. The application must include a clear 
statement of the ultimate goals of the Project. There must be an 
explanation of how a market will be expanded and the degree to which 
incremental revenue will accrue to the benefit of the Agricultural 
Producer(s).
    ii. Performance Evaluation Criteria. Applicants applying for 
Planning Grants must suggest at least one criterion by which their 
performance under a grant could be evaluated. Applicants applying for 
Working Capital Grants must identify the projected increase in customer 
base, revenue accruing to Independent Producers, and number of jobs 
attributed to the Project. Working capital projects with significant 
energy components must also identify the projected increase in capacity 
(e.g. gallons of ethanol produced annually, megawatt hours produced 
annually) attributed to the Project. Please note that these criteria 
are different from the Proposal Evaluation Criteria and are a separate 
requirement.
    iii. Proposal Evaluation Criteria. Each of the proposal evaluation 
criteria referenced in this funding announcement must be addressed, 
specifically and individually, in narrative form. Applications that do 
not address the appropriate criteria (Planning Grant applications must 
address Planning Grant evaluation criteria and Working Capital Grant 
applications must address Working Capital Grant evaluation criteria) 
will be considered ineligible.
    9. Certification of Matching Funds. Applicants must certify that 
Matching Funds will be available at the same time grant funds are 
anticipated to be spent and that Matching Funds will be spent in 
advance of grant funding, such that for every dollar of grant funds 
advanced, not less than an equal amount of Matching Funds will have 
been expended prior to submitting the request for reimbursement. Please 
note that this certification is a separate requirement from the 
verification of matching funds requirement. Applicants must include a 
statement for this section

[[Page 18953]]

that reads as follows: ``[INSERT NAME OF APPLICANT] certifies that 
matching funds will be available at the same time grant funds are 
anticipated to be spent and that matching funds will be spent in 
advance of grant funding, such that for every dollar of grant funds 
advanced, not less than an equal amount of matching funds will have 
been expended prior to submitting the request for reimbursement.'' A 
separate signature is not required.
    10. Verification of Matching Funds. Applicants must provide 
documentation of all proposed Matching Funds, both cash and in-kind. 
The documentation must be included in the Appendix.
    If Matching Funds are to be provided by the applicant in cash, a 
copy of a bank statement with an ending date within one month of the 
application submission is required. The bank statement must show an 
ending balance equal to or greater than the amount of cash Matching 
Funds proposed. If the Matching Funds will be provided through a loan 
or line of credit, the applicant must include a signed letter from the 
lending institution verifying the amount available, the time period of 
availability of the funds, and the purposes for which funds may be 
used.
    If the Matching Funds are to be provided by the applicant through 
an in-kind contribution, the application must include a signed letter 
from the applicant verifying the goods or services to be donated, when 
the goods and services will be donated, and the value of the goods or 
services. Please note that if the applicant organization is purchasing 
goods or services for the grant (e.g. salaries, inventory), the 
contribution is considered a cash contribution and must be verified as 
described in the preceding paragraph. Also, if an owner or employee of 
the applicant organization is donating goods or services, the 
contribution is considered a third-party in-kind contribution and must 
be verified as described below. Verification for in-kind contributions 
donated outside the proposed time period of the grant will not be 
accepted. Verification for in-kind contributions that are over-valued 
will not be accepted. The valuation process for the in-kind funds does 
not need to be included in the application, especially if it is 
lengthy, but the applicant must be able to demonstrate how the 
valuation was achieved at the time of notification of tentative 
selection for the grant award. If the applicant cannot satisfactorily 
demonstrate how the valuation was determined, the grant award may be 
withdrawn or the amount of the grant may be reduced.
    If the Matching Funds are to be provided by a third party in cash, 
the application must include a signed letter from that third party 
verifying how much cash will be donated and when it will be donated. 
Verification for funds donated outside the proposed time period of the 
grant will not be accepted.
    If the Matching Funds are to be provided by a third party in-kind 
donation, the application must include a signed letter from the third 
party verifying the goods or services to be donated, when the goods and 
services will be donated, and the value of the goods or services. 
Verification for in-kind contributions donated outside the proposed 
time period of the grant will not be accepted. Verification for in-kind 
contributions that are over-valued will not be accepted. The valuation 
process for the in-kind funds does not need to be included in the 
application, especially if it is lengthy, but the applicant must be 
able to demonstrate how the valuation was achieved at the time of 
notification of tentative selection for the grant award. If the 
applicant cannot satisfactorily demonstrate how the valuation was 
determined, the grant award may be withdrawn or the amount of the grant 
may be reduced.
    If Matching Funds are in cash, they must be spent on goods and 
services that are eligible expenditures for this grant program. If 
Matching Funds are in-kind contributions, the donated goods or services 
must be considered eligible expenditures for this grant program. The 
Matching Funds must be spent or donated during the grant period and the 
funds must be expended at a rate equal to or greater than the rate 
grant funds are expended. Some examples of acceptable uses for matching 
funds are: skilled labor performing work required for the proposed 
Project, office supplies, and purchasing inventory. Some examples of 
unacceptable uses of matching funds are: Land, fixed equipment, 
buildings, and vehicles.
    Expected program income may not be used to fulfill the Matching 
Funds requirement at the time of application. If program income is 
earned during the time period of the grant, it is subject to the 
requirements of 7 CFR part 3015, subpart F and 7 CFR 3019.24 and any 
provisions in the Grant Agreement.

C. Submission Dates and Times

    Application Deadline Date: May 16, 2007.
    Explanation of Deadlines: Paper applications must be postmarked by 
the deadline date (see Section IV.F. for the address). Final electronic 
applications must be received by Grants.gov by the deadline date. If an 
application does not meet the deadline above, it will not be considered 
for funding. Applicants will be notified that their applications did 
not meet the submission deadline. Applicants will also be notified by 
mail or by e-mail if their applications are received on time.

D. Intergovernmental Review of Applications

    Executive Order (EO) 12372, Intergovernmental Review of Federal 
Programs, applies to this program. This EO requires that Federal 
agencies provide opportunities for consultation on proposed assistance 
with State and local governments. Many states have established a Single 
Point of Contact (SPOC) to facilitate this consultation. A list of 
states that maintain an SPOC may be obtained at http://www.whitehouse.gov/omb/grants/spoc.html. If an applicant's state has an 
SPOC, the applicant may submit the application directly for review. Any 
comments obtained through the SPOC must be provided to Rural 
Development for consideration as part of the application. If the 
applicant's state has not established an SPOC, or the applicant does 
not want to submit the application, Rural Development will submit the 
application to the SPOC or other appropriate agency or agencies.
    Applicants are also encouraged to contact their Rural Development 
State Office for assistance and questions on this process. The Rural 
Development State Office can be reached by calling (202) 720-4323 and 
selecting option ``1'' or by viewing the following Web site: http://www.rurdev.usda.gov/.

E. Funding Restrictions

    Funding restrictions apply to both grant funds and matching funds. 
Funds may only be used for planning activities or working capital for 
Projects focusing on processing and marketing a value-added product.
    1. Examples of acceptable planning activities include:
    i. Obtaining legal advice and assistance related to the proposed 
Venture;
    ii. Conducting a Feasibility Study of a proposed Value-Added 
Venture to help determine the potential marketing success of the 
Venture;
    iii. Developing a Business Plan that provides comprehensive details 
on the management, planning, and other operational aspects of a 
proposed Venture; and
    iv. Developing a marketing plan for the proposed Value-Added 
product, including the identification of a market window, the 
identification of potential buyers, a description of the distribution

[[Page 18954]]

system, and possible promotional campaigns.
    2. Examples of acceptable working capital uses include:
    i. Designing or purchasing an accounting system for the proposed 
Venture;
    ii. Paying for salaries, utilities, and rental of office space;
    iii. Purchasing inventory, office equipment (e.g. computers, 
printers, copiers, scanners), and office supplies (e.g. paper, pens, 
file folders); and
    iv. Conducting a marketing campaign for the proposed Value-Added 
product.
    3. No funds made available under this solicitation shall be used 
to:
    i. Plan, repair, rehabilitate, acquire, or construct a building or 
facility, including a processing facility;
    ii. Purchase, rent, or install fixed equipment, including 
processing equipment;
    iii. Purchase vehicles, including boats;
    iv. Pay for the preparation of the grant application;
    v. Pay expenses not directly related to the funded Venture;
    vi. Fund political or lobbying activities;
    vii. Fund any activities prohibited by 7 CFR parts 3015 and 3019;
    viii. Fund architectural or engineering design work for a specific 
physical facility;
    ix. Fund any expenses related to the production of any commodity or 
product to which value will be added, including seed, rootstock, labor 
for harvesting the crop, and delivery of the commodity to a processing 
facility. The Agency considers these expenses to be ineligible because 
the intent of the program is to assist producers with marketing value-
added products rather than producing Agricultural Commodities;
    x. Fund research and development;
    xi. Purchase land;
    xii. Duplicate current services or replace or substitute support 
previously provided;
    xiii. Pay costs of the Project incurred prior to the date of grant 
approval;
    xiv. Pay for assistance to any private business enterprise which 
does not have at least 51 percent ownership by those who are either 
citizens of the United States or reside in the United States after 
being legally admitted for permanent residence; or
    xv. Pay any judgment or debt owed to the United States; or
    xvi. Conduct activities on behalf of anyone other than a specific 
Independent Producer or group of Independent Producers. The Agency 
considers conducting industry-level Feasibility Studies and Business 
Plans that are also known as feasibility study templates or guides or 
business plan templates or guides to be ineligible because the 
assistance is not provided to a specific group of Independent 
Producers.
    xvii. Pay for any goods or services provided by a person or entity 
who has a Conflict of Interest. Also, note that in-kind Matching Funds 
may not be provided by a person or entity that has a Conflict of 
Interest.

F. Other Submission Requirements

    Paper applications must be submitted to USDA Rural Development 
Cooperative Programs, Attn: VAPG Program, Mail STOP 3250, Room 4016-
South, 1400 Independence Ave., SW., Washington, DC 20250-3250. The 
phone number that should be used for courier delivery is (202) 720-
7558. Applications can also be submitted electronically at http://www.grants.gov. Applications submitted by electronic mail, facsimile, 
or by hand-delivery will not be accepted. Each application submission 
must contain all required documents in one envelope, if by mail or 
courier delivery service.

V. Application Review Information

A. Criteria

    All eligible and complete applications will be evaluated based on 
the following criteria. Applications for Planning Grants have different 
criteria to address than applications for Working Capital Grants.
    1. Criteria for applications for Planning Grants are:
    i. Nature of the proposed venture (0-10 points). Projects will be 
evaluated for technological feasibility, operational efficiency, 
profitability, sustainability and the likely improvement to the local 
rural economy. Evaluators may rely on their own knowledge and examples 
of similar ventures described in the proposal to form conclusions 
regarding this criterion. Points will be awarded based on the greatest 
expansion of markets and increased returns to producers based on the 
following structure.
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in all areas of the 
criterion.
    <bullet> 4-6 points will be awarded if the applicant demonstrates 
that the Project meets part, but not all, of the criterion.
    <bullet> 7-9 points will be awarded if the applicant demonstrates 
that the Project is strong in all areas of the criterion.
    <bullet> 10 points will only be awarded if the applicant 
demonstrates that the Project is strong in all areas of the criterion 
and the Project is expected to significantly expand the market for the 
Value-Added product to be produced and/or the Project will 
significantly increase returns to the Independent Producer owners of 
the Venture.
    ii. Qualifications of those doing work (0-5 points). Proposals will 
be reviewed for whether the personnel who are responsible for doing 
proposed tasks, including those hired to do the studies, have the 
necessary qualifications. If a consultant or others are to be hired, 
more points may be awarded if the proposal includes evidence of their 
availability and commitment as well. If staff or consultants have not 
been selected at the time of application, the application should 
include specific descriptions of the qualifications required for the 
positions to be filled. The qualifications of the personnel and 
consultants should be discussed directly within the response to this 
criterion. If resumes are included, those pages will be counted toward 
the page limit for the narrative. Points will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1 point will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in the qualifications 
of the personnel.
    <bullet> 2-3 points will be awarded if the applicant demonstrates 
that the qualifications of the personnel are adequate for the Project.
    <bullet> 4 points will be awarded if the applicant demonstrates 
that the qualifications of the personnel are above average for the 
Project.
    <bullet> 5 points will only be awarded if the applicant 
demonstrates that the qualifications of the personnel are outstanding 
and could not be improved.
    iii. Commitments and support (0-10 points). Producer commitments 
will be evaluated on the basis of the number of Independent Producers 
currently involved as well as how many may potentially be involved, and 
the nature, level and quality of their contributions. End user 
commitments will be evaluated on the basis of potential markets and the 
potential amount of output to be purchased. Proposals will be reviewed 
for evidence that the project enjoys third party support and 
endorsement, with emphasis placed on financial and in kind support as 
well as technical assistance. Support should be discussed directly 
within the response to this criterion. If support letters are included, 
those pages will be counted

[[Page 18955]]

toward the page limit for the narrative. Points will be awarded based 
on the greatest level of documented and referenced commitment. Points 
will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in all areas of the 
criterion.
    <bullet> 4-6 points will be awarded if the applicant demonstrates 
that the Project has strong financial commitment from all of the 
Independent Producer owners of the Venture, but lacks third-party 
support and end user commitment.
    <bullet> 7-9 points will be awarded if the applicant demonstrates 
that the Project has strong financial commitment from all of the 
Independent Producer owners of the Venture AND there is third party 
financial and/or in-kind support, but lacks end user commitment.
    <bullet> 10 points will only be awarded if the applicant 
demonstrates that the Project has strong financial commitment from all 
of the Independent Producer owners of the Venture AND there is third 
party financial and/or in-kind support AND there is evidence of end 
user commitment.
    iv. Project leadership (0-5 points). The leadership abilities of 
individuals who are proposing the Venture will be evaluated as to 
whether they are sufficient to support a conclusion of likely project 
success. Credit may be given for leadership evidenced in community or 
volunteer efforts. The leadership abilities should be discussed 
directly within the response to this criterion. If resumes are attached 
at the end of the application, those pages will be counted toward the 
page limit for the narrative. Points will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1 point will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in the leadership 
abilities.
    <bullet> 2-3 points will be awarded if the applicant demonstrates 
that the leadership abilities are adequate for the Project.
    <bullet> 4 points will be awarded if the applicant demonstrates 
that the leadership abilities are above average for the Project.
    <bullet> 5 points will only be awarded if the applicant 
demonstrates that the leadership abilities are outstanding and could 
not be improved.
    v. Work plan/budget (0-10 points). Applicants must submit a work 
plan and budget. The work plan will be reviewed to determine whether it 
provides specific and detailed descriptions of tasks that will 
accomplish the project's goals. The budget will be reviewed for a 
detailed breakdown of estimated costs associated with the planning 
activities. The budget must present a detailed breakdown of all 
estimated costs associated with the planning activities and allocate 
these costs among the listed tasks. Points may not be awarded unless 
sufficient detail is provided to determine whether or not funds are 
being used for qualified purposes. Matching funds as well as grant 
funds must be accounted for in the budget to receive points. Points 
will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the budget and work plan 
only associate grant and matching funds dollar amounts with Project 
tasks, but do not identify specific time frames and personnel by task.
    <bullet> 4-6 points will be awarded if the budget and work plan 
associate grant and matching funds dollar amounts with Project tasks 
and identify specific time frames for Project tasks, but do not 
identify personnel for Project tasks.
    <bullet> 7-9 points will be awarded if the budget and work plan 
associate grant and matching dollar amounts, specific time frames, and 
personnel with Project tasks.
    <bullet> 10 points will only be awarded if the budget and work plan 
associate dollar amounts, specific time frames, and personnel with 
Project tasks and these dollar amounts, time frames, and personnel are 
realistic for the Project.
    vi. Amount requested (0 or 2 points). Two points will be awarded 
for grant requests of $50,000 or less. To determine the number of 
points to award, the Agency will use the amount indicated in the work 
plan and budget.
    vii. Project cost per owner-producer (0-3 points). The applicant 
must state the number of Independent Producers that are owners of the 
Venture. Points will be calculated by dividing the amount of Federal 
funds requested by the total number of Independent Producers that are 
owners of the Venture. The allocation of points for this criterion 
shall be as follows:
    <bullet> 0 points will be awarded to applications without enough 
information to determine the number of owner-producers.
    <bullet> 1 point will be awarded to applications with a project 
cost per owner-producer of $70,001-$100,000.
    <bullet> 2 points will be awarded to applications with a project 
cost per owner-producer of $35,001-$70,000.
    <bullet> 3 points will be awarded to applications with a project 
cost per owner-producer of $1-$35,000.
    An owner cannot be considered an Independent Producer unless he/she 
is a producer of the Agricultural Commodity to which value will be 
added as part of this Project. For Agriculture Producer Groups, the 
number used must be the number of Independent Producers represented who 
produce the commodity to which value will be added. In cases where 
family members (including husband and wife) are owners and producers in 
a Venture, each family member shall count as one owner-producer.
    Applicants must be prepared to prove that the numbers and 
individuals identified meet the requirements specified upon 
notification of a grant award. Failure to do so shall result in 
withdrawal of the grant award.
    viii. Business management capabilities (0-10 points). Applicants 
must discuss their financial management system, procurement procedures, 
personnel policies, property management system, and travel procedures. 
Up to two points can be awarded for each component of this criterion, 
based on the appropriateness of the system, procedures or policies to 
the size and structure of the business applying. Larger, more complex 
businesses will be expected to have more complex systems, procedures, 
and policies than smaller, less complex businesses.
    ix. Sustainability and economic impact (0-15 points). Projects will 
be evaluated based on the expected sustainability of the Venture and 
the expected economic impact on the local economy. Points will be 
awarded as follows:
    <bullet> 0-4 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 5-9 points will be awarded if the applicant demonstrates 
that the Project has a reasonable chance of success OR will have a 
small impact on the local economy.
    <bullet> 10-14 points will be awarded if the applicant demonstrates 
that the Project has a reasonable chance of success and will have a 
small impact on the local economy.
    <bullet> 15 points will only be awarded if the applicant 
demonstrates that the Project is likely to succeed and that it will 
have a significant impact on the local economy.
    x. Business size (5 points if the application meets the criterion 
or 0

[[Page 18956]]

points if the application does not meet the criterion). Applicants must 
state the amount of gross sales earned for their most recent complete 
fiscal year or start-up operations must state that that they have not 
completed a fiscal year. Points will be awarded as follows:
    <bullet> 0 points will be awarded to applicants that have $10 
million or more in gross sales OR to applicants that do not provide 
enough information to determine gross sales.
    <bullet> 5 points will be awarded to applicants that have less than 
$10 million in gross sales.
    If an applicant is tentatively selected for funding, the applicant 
will need to verify the gross sales amount at the time of award. 
Failure to verify the amount stated in the application will be grounds 
for withdrawing the award.
    xi. Administrator points (up to 5 points, but not to exceed 10 
percent of the total points awarded for the other 10 criteria). The 
Administrator of USDA Rural Development Business and Cooperative 
Programs may award additional points to recognize innovative 
technologies, insure geographic distribution of grants, or encourage 
Value-Added Projects in under-served areas. Applicants may submit an 
explanation of how the technology proposed is innovative and/or 
specific information verifying that the project is in an under-served 
area.
    2. Criteria for Working Capital applications are:
    i. Business viability (0-10 points). Proposals will be evaluated on 
the basis of the technical and economic feasibility and sustainability 
of the Venture and the efficiency of operations. Points will be awarded 
as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in all areas of the 
criterion.
    <bullet> 4-6 points will be awarded if the applicant demonstrates 
that the Project is strong for at least half of the components of the 
criterion.
    <bullet> 7-9 points will be awarded if the applicant demonstrates 
that the Project is strong in at least three components of the 
criterion.
    <bullet> 10 points will only be awarded if the applicant 
demonstrates that the Project is strong based on all components of the 
criterion.
    ii. Customer base/increased returns (0-10 points). Describe in 
detail how the customer base for the product being produced will expand 
because of the Value-Added Venture. Provide documented estimates of 
this expansion. Describe in detail how a greater portion of the revenue 
derived from the venture will be returned to the producers that are 
owners of the Venture. Applicants should also reference the pro forma 
financial statements developed for the Venture. Applications that 
demonstrate strong growth in a market or customer base and greater 
Value-Added revenue accruing to producer-owners will receive more 
points than those that demonstrate less growth in markets and realized 
Value-Added returns. Points will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in all areas of the 
criterion.
    <bullet> 4-6 points will be awarded if the applicant demonstrates 
that the Project will reasonably expand the customer base for the 
Value-Added product OR increase returns to the Independent Producer 
owners of the Venture.
    <bullet> 7-9 points will be awarded if the applicant demonstrates 
that the Project will reasonably expand the customer base for the 
Value-Added product AND increase returns to the Independent Producer 
owners of the Venture.
    <bullet> 10 points will only be awarded if the applicant 
demonstrates that the Project is expected to expand the customer base 
for the Value-Added product AND increase returns to the Independent 
Producer owners of the Venture in an exceptional way.
    iii. Commitments and support (0-5 points). Producer commitments 
will be evaluated on the basis of the number of Independent Producers 
currently involved as well as how many may potentially be involved, and 
the nature, level and quality of their contributions. End user 
commitments will be evaluated on the basis of identified markets, 
letters of intent or contracts from potential buyers and the amount of 
output to be purchased. Applications will be reviewed for evidence that 
the Project enjoys third party support and endorsement, with emphasis 
placed on financial and in kind support as well as technical 
assistance. Support should be discussed directly within the response to 
this criterion. If support letters are included, those pages will be 
counted toward the page limit for the narrative. Points will be awarded 
based on the greatest level of documented and referenced commitment. 
Points will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1 point will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in all areas of the 
criterion.
    <bullet> 2-3 points will be awarded if the applicant demonstrates 
that the Project has strong financial commitment from all of the 
Independent Producer owners of the Venture, but lacks third-party 
support and end user commitment.
    <bullet> 4 points will be awarded if the applicant demonstrates 
that the Project has strong financial commitment from all of the 
Independent Producer owners of the Venture and there is third party 
financial and/or in-kind support, but lacks end user commitment.
    <bullet> 5 points will only be awarded if the applicant 
demonstrates that the Project has strong financial commitment from all 
of the Independent Producer owners of the Venture and there is third 
party financial and/or in-kind support AND there is evidence of end 
user commitment.
    iv. Management team/work force (0-5 points). The education and 
capabilities of project managers and those who will operate the Venture 
must reflect the skills and experience necessary to affect Project 
success. The availability and quality of the labor force needed to 
operate the Venture will also be evaluated. Applicants must provide the 
information necessary to make these determinations. Applications that 
reflect successful track records managing similar projects will receive 
higher points for this criterion than those that do not reflect 
successful track records. Points will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1 point will be awarded if the applicant only partially 
addresses the criterion or demonstrates weakness in the qualifications 
of the personnel.
    <bullet> 2-3 points will be awarded if the applicant demonstrates 
that the education and capabilities of the Project managers and 
operators of the Venture and the availability and quality of the labor 
force are adequate for the Project.
    <bullet> 4 points will be awarded if the applicant demonstrates 
that the education and capabilities of the Project managers and 
operators of the Venture and the availability and quality of the labor 
force are above average for the Project.
    <bullet> 5 points will only be awarded if the applicant 
demonstrates that the education and capabilities of the Project 
managers and operators of the Venture and the availability and quality 
of the labor force are outstanding and could not be improved.

[[Page 18957]]

    v. Work plan/budget (0-10 points). The work plan will be reviewed 
to determine whether it provides specific and detailed descriptions of 
tasks that will accomplish the project's goals and the budget will be 
reviewed for a detailed breakdown of estimated costs associated with 
the proposed activities. The budget must present a detailed breakdown 
of all estimated costs associated with the Project's operations and 
allocate these costs among the listed tasks. Points may not be awarded 
unless sufficient detail is provided to determine whether or not funds 
are being used for qualified purposes. Matching Funds as well as grant 
funds must be accounted for in the budget to receive points. Points 
will be awarded as follows:
    <bullet> 0 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 1-3 points will be awarded if the budget and work plan 
only associate grant and matching funds dollar amounts with Project 
tasks, but do not identify specific time frames and personnel by task.
    <bullet> 4-6 points will be awarded if the budget and work plan 
associate grant and matching funds dollar amounts with Project tasks 
and identify specific time frames for Project tasks, but do not 
identify personnel for Project tasks.
    <bullet> 7-9 points will be awarded if the budget and work plan 
associate grant and matching dollar amounts, specific time frames, and 
personnel with Project tasks.
    <bullet> 10 points will only be awarded if the budget and work plan 
associate dollar amounts, specific time frames, and personnel with 
Project tasks and these dollar amounts, time frames, and personnel are 
realistic for the Project.
    vi. Amount requested (0 or 2 points). Two points will be awarded 
for grant requests of $150,000 or less. To determine the number of 
points to award, the Agency will use the amount indicated in the work 
plan and budget.
    vii. Project cost per owner-producer (0-3 points). The applicant 
must state the number of Independent Producers that are owners of the 
Venture. Points will be calculated by dividing the amount of Federal 
funds requested by the total number of Independent Producers that are 
owners of the Venture. The allocation of points for this criterion 
shall be as follows:
    <bullet> 0 points will be awarded to applications without enough 
information to determine the number of owner-producers.
    <bullet> 1 point will be awarded to applications with a project 
cost per owner-producer of $200,001-$300,000.
    <bullet> 2 points will be awarded to applications with a project 
cost per owner-producer of $100,001-$200,000.
    <bullet> 3 points will be awarded to applications with a project 
cost per owner-producer of $1-$100,000.
    An owner cannot be considered an Independent Producer unless he/she 
is a producer of the Agricultural Commodity to which value will be 
added as part of this Project. For Agriculture Producer Groups, the 
number used must be the number of Independent Producers represented who 
produce the commodity to which value will be added. In cases where 
family members (including husband and wife) are owners and producers in 
a Venture, each family member shall count as one owner-producer.
    Applicants must be prepared to prove that the numbers and 
individuals identified meet the requirements specified upon 
notification of a grant award. Failure to do so shall result in 
withdrawal of the grant award.
    viii. Business management capabilities (0-10 points). Applicants 
should discuss their financial management system, procurement 
procedures, personnel policies, property management system, and travel 
procedures. Up to two points can be awarded for each component of this 
criterion, based on the appropriateness of the system, procedures or 
policies to the size and structure of business applying. Larger, more 
complex businesses will be expected to have more complex systems, 
procedures, and policies than smaller, less complex businesses.
    ix. Sustainability and economic impact (0-15 points). Projects will 
be evaluated based on the expected sustainability of the Venture and 
the expected economic impact on the local economy. Points will be 
awarded as follows:
    <bullet> 0-4 points will be awarded if the applicant does not 
substantively address the criterion.
    <bullet> 5-9 points will be awarded if the applicant demonstrates 
that the Project has a reasonable chance of success OR will have a 
small impact on the local economy.
    <bullet> 10-14 points will be awarded if the applicant demonstrates 
that the Project has a reasonable chance of success and will have a 
small impact on the local economy.
    <bullet> 15 points will only be awarded if the applicant 
demonstrates that the Project is likely to succeed and that it will 
have a significant impact on the local economy.
    x. Business size (5 points if the application meets the criterion 
or 0 points if the application does meet the criterion). Applicants 
must state the amount of gross sales earned for their most recent 
complete fiscal year or start-up operations must state that that they 
have not completed a fiscal year. Points will be awarded as follows:
    <bullet> 0 points will be awarded to applicants that have $10 
million or more in gross sales or to applicants that do not provide 
enough information to determine gross sales.
    <bullet> 5 points will be awarded to applicants that have less than 
$10 million in gross sales.
    If an applicant is tentatively selected for funding, the applicant 
will need to verify the gross sales amount at the time of award. 
Failure to verify the amount stated in the application will be grounds 
for withdrawing the award.
    xi. Administrator points (up to 5 points, but not to exceed 10 
percent of the total points awarded for the other 10 criteria). The 
Administrator of USDA Rural Development Business and Cooperative 
Programs may award additional points to recognize innovative 
technologies, insure geographic distribution of grants, or encourage 
value-added projects in under-served areas. Applicants may submit an 
explanation of how the technology proposed is innovative and/or 
specific information verifying that the project is in an under-served 
area.

B. Review and Selection Process

    The Agency will conduct an initial screening of all applications 
for eligibility and to determine whether the application is complete 
and sufficiently responsive to the requirements set forth in this 
Notice to allow for an informed review.
    All eligible and complete proposals will be evaluated by three 
reviewers based on criteria i through v described in Section V.1 or 
V.2. One of these reviewers will be a Rural Development employee not 
from the servicing State Office and the other two reviewers will be 
non-Federal persons. All reviewers must either: (1) Possess at least 
five years of working experience in an agriculture-related field, or 
(2) have obtained at least a bachelors degree in one or more of the 
following fields: Agri-business, business, economics, finance, or 
marketing and have a minimum of three years of experience in an 
agriculture-related field (e.g. farming, marketing, consulting, 
university professor, research, officer for trade association, 
government employee for an agricultural program). Once the scores for 
criteria i through v have been completed by the three reviewers, they

[[Page 18958]]

will be averaged to obtain the independent reviewer score.
    The application will also receive one score from the Rural 
Development servicing State Office based on criteria vi through x. This 
score will be added to the independent reviewer score.
    Finally, the Administrator of USDA Rural Development Business and 
Cooperative Programs will award any Administrator points based on 
Proposal Evaluation Criterion xi. These points will be added to the 
cumulative score for criteria i through x. A final ranking will be 
obtained based solely on the scores received for criteria i through xi.
    After the award selections are made, all applicants will be 
notified of the status of their applications by mail. Grantees must 
meet all statutory and regulatory program requirements in order to 
receive their award. In the event that a grantee cannot meet the 
requirements, the award will be withdrawn. Applicants for Working 
Capital Grants must submit complete, independent third-party 
Feasibility Studies and Business Plans before the grant award can be 
finalized. All Projects will be evaluated by the servicing State Office 
prior to finalizing the award to ensure that funded Projects are likely 
to be feasible in the proposed project area. Regardless of scoring, a 
Project determined to be unlikely to be feasible by the servicing State 
Office with concurrence by the National Office will not be funded.

C. Anticipated Announcement and Award Dates

    Award Date: The announcement of award selections is expected to 
occur on or about September 1, 2007.

VI. Award Administration Information

A. Award Notices

    Successful applicants will receive a notification of tentative 
selection for funding from Rural Development. Applicants must comply 
with all applicable statutes, regulations, and this notice before the 
grant award will receive final approval.
    Unsuccessful applicants will receive notification, including 
dispute resolution alternatives, by mail.

B. Administrative and National Policy Requirements

    7 CFR parts 3015, 3019, and 4284. These regulations may be accessed 
at http://www.access.gpo.gov/nara/cfr/cfr-table-search.html#page1.
    The following additional requirements apply to grantees selected 
for this program:
    Grant Agreement.
    Letter of Conditions.
    Form RD 1940-1, ``Request for Obligation of Funds.''
    Form RD 1942-46, ``Letter of Intent to Meet Conditions.''
    Form AD-1047, ``Certification Regarding Debarment, Suspension, and 
Other Responsibility Matters-Primary Covered Transactions.''
    Form AD-1048, ``Certification Regarding Debarment, Suspension, 
Ineligibility and Voluntary Exclusion-Lower Tier Covered 
Transactions.''
    Form AD-1049, ``Certification Regarding a Drug-Free Workplace 
Requirements (Grants).''
    Form RD 400-4, ``Assurance Agreement.''
    Additional information on these requirements can be found at http://www.rurdev.usda.gov/rbs/coops/vadg.htm.
    Reporting Requirements: Grantees must provide Rural Development 
with a paper or electronic copy that includes all required signatures 
of the following reports. The reports must be submitted to the Agency 
contact listed on the Grant Agreement and Letter of Conditions. Failure 
to submit satisfactory reports on time may result in suspension or 
termination of the grant.
    1. Form SF-269 or SF-269A. A ``Financial Status Report,'' listing 
expenditures according to agreed upon budget categories, on a semi-
annual basis. Reporting periods end each March 31 and September 30, 
regardless of when the grant period begins. Reports are due 30 days 
after the reporting period ends.
    2. Semi-annual performance reports that compare accomplishments to 
the objectives stated in the Grant Agreement. Identify all tasks 
completed to date and provide documentation supporting the reported 
results. If the original schedule provided in the work plan is not 
being met, the report should discuss the problems or delays that may 
affect completion of the project. Objectives for the next reporting 
period should be listed. Compliance with any special condition on the 
use of award funds should be discussed. Reports are due as provided in 
paragraph (1) of this section. Supporting documentation must also be 
submitted for completed tasks. The supporting documentation for 
completed tasks include, but are not limited to, Feasibility Studies, 
marketing plans, Business Plans, articles of incorporation and bylaws 
and an accounting of how working capital funds were spent.
    3. Final Project performance reports that compare accomplishments 
to the objectives stated in the proposal. Identify all tasks completed 
and provide documentation supporting the reported results. If the 
original schedule provided in the work plan was not met, the report 
must discuss the problems or delays that affected completion of the 
project. Compliance with any special condition on the use of award 
funds should be discussed. Supporting documentation for completed tasks 
must also be submitted. The supporting documentation for completed 
tasks include, but are not limited to, Feasibility Studies, marketing 
plans, Business Plans, articles of incorporation and bylaws and an 
accounting of how working capital funds were spent. Planning Grant 
Projects must also report the estimated increase in revenue, increase 
in customer base, number of jobs created, and any other relevant 
economic indicators generated by continuing the project into its 
operational phase. Working Capital Grants must report the increase in 
revenue, increase in customer base, number of jobs created, any other 
relevant economic indicators generated by the project during the grant 
period in addition to the total funds used for the Venture during the 
grant period. These total funds must include other federal, state, 
local, and other funds used for the venture. Projects with significant 
energy components must also report expected or actual capacity (e.g. 
gallons of ethanol produced annually, megawatt hours produced annually) 
and any emissions reductions incurred during the project. The final 
performance report is due within 90 days of the completion of the 
project.

VII. Agency Contacts

    For general questions about this announcement and for program 
technical assistance, applicants should contact their USDA Rural 
Development State Office at http://www.rurdev.usda.gov/rbs/coops/vadg.htm. The State Office can also be reached by calling (202) 720-
4323 and pressing ``1''. If an applicant is unable to contact their 
State Office, a nearby State Office may be contacted or the RBS 
National Office can be reached at Mail STOP 3250, Room 4016-South, 1400 
Independence Avenue, SW., Washington, DC 20250-3250, Telephone: (202) 
720-7558, e-mail: <a href="/cdn-cgi/l/email-protection#99fae9feebf8f7edead9eefdfab7eceafdf8b7fef6ef"><span class="__cf_email__" data-cfemail="c1a2b1a6b3a0afb5b281b6a5a2efb4b2a5a0efa6aeb7">[email protected]</span></a>.
    The U.S. Department of Agriculture (USDA) prohibits discrimination 
in all its programs and activities on the basis of race, color, 
national origin, age, disability, and where applicable, sex, marital 
status, familial status, parental status, religion, sexual orientation, 
genetic information, political beliefs,

[[Page 18959]]

reprisal, or because all or part of an individual's income is derived 
from any public assistance program. (Not all prohibited bases apply to 
all programs.) Persons with disabilities who require alternative means 
for communication of program information (Braille, large print, 
audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 
(voice and TDD). To file a complaint of discrimination, write to USDA, 
Director, Office of Civil Rights, 1400 Independence Avenue, SW., 
Washington, DC 20250-9410, or call (866) 632-9992 (voice) or (202) 401-
0216 (TDD). USDA is an equal opportunity provider and employer.

    Dated: April 10, 2007.
Jackie J. Gleason,
Administrator, Rural Business-Cooperative Service.
[FR Doc. E7-7110 Filed 4-13-07; 8:45 am]
BILLING CODE 3410-XY-P


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